Law School Student Debt Crisis

Law School Student Debt Crisis

The problem of new graduate joblessness is even worse considering the amount of debt most students have upon graduation, clearly caused by the rapidly increasing law school tuition. In just the last ten years, from 1998 to 2008, tuition at public law schools increased by 74 percent, and public schools saw tuitions rise 102 percent.[1]  "In 2008, the median tuition at state schools for nonresidents was $26,000 a year, and $34,000 for private schools-and much higher in some states, such as California."[2]  Since there are so many more law schools, schools have raised tuition in order to compete and to maintain or increase their rankings in U.S.  News and World Report (USNWR), a driving force behind students' law school selections. The USNWR rankings are based in part on expenditures per student, student-faculty ratios, and library resources, which all require significant investment for improvement.[3]  The student-to-faculty ratio in 1978, for example, was 29-to-1, and in 2008 it was 14.9-to-1, so there are twice as many law professors per student today than when many of those professors attended law school.[4]  Schools also attempt to attract the best faculty by offering higher salaries, or attract students through clinical offerings, more diverse course selections, other small skills-based classes, and increased student support services, all of which are also costly for schools.[5]  In part, law schools are influenced by moral hazard: "deans and faculty have almost zero incentive to reign in the cost of legal education or to provide more value for the tuition dollar.  Just think how quickly law schools would change their staffing, teaching, and community involvement if they had to personally collect loan payments from their alumni for 20 years."[6]

The rising tuition costs also mean that students graduate law school with much more debt.  The average amount of debt for 008 graduates was $59,324 for public schools and $91,506 for private schools,[7] and one third of respondents in Law School Survey of Student Engagement said they would owe about $120,000 at graduation.[8]  Students freely take on the equivalent of a home mortgage because they are too far removed from the consequences of that decision: "our current student loan system-which can often extend the cost of law schools out over 20 or 30 years of payment-insulates prospective law students from a real understanding of the enormous, life-long financial risks their education's costs place on them."[9]

Other students believe their degree will be funded by scholarships, only to lose those scholarships after their first year.  Law schools often give merit scholarships that have strict GPA or class rank requirements; when combined with the mandatory curve, this means many students will necessarily become ineligible for the awards.  For example, if a school requires that a student be in the top 20% to keep a scholarship, a maximum of 20% of the class could keep their scholarship, so schools offer far more in scholarship money than they could afford to sustain for the full three years, knowing there is a strict ceiling to the amount they will have to expend after students' first year.  Some schools like St. John's University School of Law are also reported to put all scholarship recipients into one section so they will compete against one another and weed each other out.[10]  After a student has already completed the dreaded 1L year, it can be an almost impossible decision to drop out rather than continue law school and just fund it with loans, so schools are able to attract strong students by offering scholarship money, but then keep those students whose grades are now too low to transfer to a better school, all while collecting their tuition dollars.



[1] Jack Crittenden, "Law School Faculties 40% Larger than 10 Years Ago," The National Jurist, March 9, 2010, http://www.nationaljurist.com/content/law-school-faculties-40-larger-10-years-ago.

[2] Greenbaum, "No More Room."

[3] GAO, 21.

[4] Crittenden, "Law School Faculties."

[5] GAO, 20-21.

[6] Aaron Street, "Applying to Law School? Please Reconsider!" Lawyerist, December 17, 2009, http://lawyerist.com/law-school-admissions-bubble/.

[7] American Bar Association, "Average Amount Borrowed for Law School 2001-2008," http://www.abanet.org/legaled/statistics/charts/stats%20-%2020.pdf.

[8] Greenbaum, "No More Room."

[9] Street, "Applying to Law School?"

[10] "Law School Scholarship Scandal," LawCareerAdvice.com, http://www.lawcareeradvice.com/scandal1.html.  Also see Ann Levine, "Things to Consider When Accepting a Law School Scholarship."

Building a Better Legal Profession (BBLP) is an organization based at Stanford Law School.   BBLP is a national grassroots movement that seeks market-based workplace reforms in large private law firms. For more information, visit BBLP's Web site at www.betterlegalprofession.org.